Dive Brief:

• Retail employment in New York City continues to lag, according to a report from the Center for an Urban Future. The retail sector there has 37,800 fewer jobs than just before the pandemic, or down 11.1%, compared to the private sector there, which is down 0.8%.

• Manhattan has the slowest recovery, with 20.4% fewer retail jobs, but retail jobs are also down 8.7% on Staten Island, 7.6% in Queens, 5.1% in Brooklyn and 3.3% in the Bronx. The declines are greatest at clothing and accessories stores (down 26.9%) and department stores (down 16.7%).

• However, retail jobs in the city have been declining since 2015. From February 2015 to February 2023 in New York, retail employment fell 13.2% while total private sector employment rose by 11.5%, per the report.

Dive Insight:

New York City’s retail decline predates the pandemic, but a number of factors have sped it up and make recovery difficult, according to the Center for an Urban Future report. Those researchers cite “the rapid growth of online shopping, the increasing adoption of automation by retailers, the slow return of office workers and the sharp drop in the city’s population.”

Even the city’s restaurants have bounced back twice as fast as retail, with employment in that sector down 5.7%, per the report.

But the biggest challenges arise in areas most dependent on office workers and international tourism, according to WPG Chief Executive Officer Chris Conlon. That’s especially true of areas like the Financial District dominated by “B” and “C” office buildings, he said by email.

“Retail in NYC is far from dead,” he said. “Areas like Soho, Flat Iron, Downtown Brooklyn and Williamsburg keep attracting new retail and the pace has been swift. Even areas along Madison Ave have seen a renewed level of impressive absorption. All these areas depend mostly on great residential demographics.”

That could include Nordstrom’s Manhattan flagship, which opened just before the pandemic. The company has since said that the location has robust support from the surrounding neighborhood.

The dynamics are similar in other cities, notably San Francisco, where Gap Inc. and Nordstrom are among those deciding to close multiple locations in recent years. A pandemic-related shift to more remote work led the San Francisco Budget and Legislative Analyst’s Office earlier this year to estimate that there are now 147,303 fewer office workers downtown each work day. Due to that decline, as well as a fall-off in tourism and other factors pressuring retail, 7,711 retail jobs were lost citywide from 2019 to 2022, according to that report.